Fix the finances, transform the organisation

Every government has a finance ministry. No matter what the political agenda, every state needs a central team that looks after the distribution of money amongst the executive’s priorities. It should be no surprise for anyone interested in transforming an organisation that their path should eventually lead them to the door of the Treasury or CFO. Those who hold the purse strings, hold power. If you’re not fixing the finances, you’re not transforming your organisation.

In most governments, finance ministry power isn’t just about giving or taking away cash. Treasuries exert influence in ways that go much deeper. Finance ministries define important processes like business cases and spending reviews, quietly shaping the questions every department must ask themselves when making investment decisions. They are often the intellectual source of new operating models for government. And they also tend to act as ‘finishing schools’ for the best and brightest public servants, immersing them in a culture that then shapes them over a long career headed for the top.

This last point is important. Digital teams talk about culture a lot. When we’re on the road, we often notice how quickly you can spot a digital team anywhere; the post-its, openness, ambition, and multidisciplinary ways of working can be seen across borders. Finance ministries the world over are also full of young, very smart, and ambitious people. But their ways of working tend to be completely different to those of a high performing digital team.

In the UK, it’s fair to say we experienced a big clash of cultures between the Government Digital Service and Her Majesty’s Treasury. We made some real progress together on issues like agile business cases, but didn’t get to the point where both sides truly spoke the same language, or worked in the same way.

So one of the things that we get really excited about is working with finance ministries who recognise that they need to adapt in order to be effective in the internet era. With our partners BCG, we’ve advised officials in New South Wales and Denmark on some of the steps we think are important.

It is not a coincidence that New South Wales and Denmark are both leading digital governments. They each recognise that in order to stay at the top, a finance ministry needs to be an active enabler of transformation. If it is not, it risks becoming a serious obstacle. To get past that, a finance ministry needs to consider how it can complement generalists with technologists, balance experimentation with assurance, invest in platforms that cut across departmental boundaries, and fund teams rather than apps.

This is not the kind of shift in process and culture that happens overnight. And it’s not a change that means replacing old ways with an entirely new mental model. Treasuries will always need to be good at the things they’ve always been good at – challenging their colleagues, interrogating big capital expenditure projects, giving future leaders a firm grounding in economics. But digital leaders will recognise that role is going to expand and shift over time. Some have already started.

This article was reproduced with permission and was originally published here.